Auto consumer affordability appears to be eroding further based on a growing number signing seven-year loans.

A first-quarter report by Edmunds indicates 84-month loans reached a historic high at 20% of new-vehicle financing. That’s up from 16% a year earlier and from 13% in 2019’s first quarter.

On the other end of the affordability scale, those securing 48-month or shorter-term loans remained strong at 10%, said Edmunds, which credited incentives paired with the shorter terms. 

In the middle was the majority at 67% opting for loans of 60 to 75 months, down from 70% a year earlier as more consumers move to either end of the scale to fit their financial situations.

Those ending up with monthly loan payments of $1,000 or more continued to hover around historic highs at about 18%, up slightly year-over-year. 

Meanwhile, 0% financing deals all but evaporated to 1% of new-vehicle loans, the lowest Edmunds has on record. That’s down from 3% a year earlier.

“Even with (interest) rates holding relatively flat, the continued reliance on extended terms and high monthly payments reveals how challenging car buying remains,” said Edmunds Head of Insights Jessica Caldwell. 

“And now, with auto tariffs officially taking effect today, there’s a risk that they will add fuel to the fire — triggering a disruption that could push vehicles even further out of reach for many shoppers."

Edmunds offered hope that a proposal floated by the White House to allow tax deductions for interest on American-made vehicles could shore up sales, though it qualified that by pointing out that it’s too early to tell whether that will materialize and if so, how it would be calculated.

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